BILL ANALYSIS                                                                                                                                                                                                    






    SENATE COMMITTEE ON AGRICULTURE AND WATER RESOURCES
                    Jim Costa, Chairman

SB 554  (Kelley)
As Amended March 25, 1999
Hearing Date: April 20, 1999
Fiscal: Yes
Consultant: Dan Webb

PURPOSE OF BILL: 

To grant a project-specific exemption to a new requirement that  
flood management projects must first be authorized by the state  
prior to similar approval by Congress.


BACKGROUND:

Traditionally the federal government has paid a minimum of 50%  
to a maximum of 75%, based on a specified formula, of total  
costs for flood management projects authorized by Congress and a  
State Legislature.  The federal Water Resources Development Act  
of 1996 (WRDA) authorized numerous projects throughout the U.S.  
using the above-described formula, but reduced federal  
participation in subsequent projects to a maximum of 65% of  
total costs.

State participation in flood management projects can either  
occur through sponsorship of the State Reclamation Board (if the  
project is in the Central Valley), or the state flood  
subventions program.  California law allows state contributions  
of up to 70% of the non-federal costs, with the remainder to be  
funded by the local sponsor.  State law also authorizes payment  
of 50% of the nonfederal capital costs of the recreation and  
fish and wildlife enhancement features of a project, if  
specifically authorized by the Legislature.

The Appropriations suspense process has traditionally been used  
to determine priorities between various projects competing for  
funding.  The state pays flood management subventions from the  
General Fund, the Special Account for Capital Outlay, or  
sometimes via bond measures.  These programs have been severely  
underfunded since 1990.  Proposition 204 paid down the  
outstanding balance by $60 million, but unpaid amounts owed to  
local governments are estimated to reach $189 million by years'  
end.  










One of last year's budget trailer bills (AB 2784, Strom-Martin)  
included a requirement that future flood management projects  
must first be authorized at the state level before seeking  
similar approval by Congress.  This requirement does not apply  
to small projects, efforts sponsored at the state level by the  
Reclamation Board, and those federally funded by agencies other  
than the U.S. Army Corps of Engineers.




PROPOSED LAW:

This bill would grant an exemption to a new general requirement  
that flood management projects must first be authorized by the  
state prior to similar approval by Congress.  The affected  
project is located in the Whitewater River Basin in Riverside  
County.  


COMMENTS:

Senate Bill 854 (Costa) was recently amended to delete a  
"state-first" flood project authorization requirement that was  
nestled in one of last year's budget trailer bills.  Its intent  
is to replace state primacy language with that developed through  
a collaborative process between stakeholders, the  
administration, and affected policy and fiscal committees.  In  
the interim, a vehicle such as SB 554 may be necessary to grant  
specific exemptions for projects facing loss of congressional  
funding in the current year.


SUPPORT:

Coachella Valley Water District (sponsor)


OPPOSED:

None Received